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SLOVAKIA


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 31,868 23,700 20,500 59
         
GNI per capita
 US $ 4,920 3,950 3,760 73
Ranking is given out of 208 nations - (data from the World Bank)

Books on Slovakia

REPUBLICAN REFERENCE

Area (sq.km) 
48,845

Population
5,423,567 

Capital 
Bratislava 

Currency 
Koruna 

President 
Ivan Gasparovic

Private sector 
% of GDP
60%


 
Update No: 110 - (27/07/06)

Fico displaces Dzurinda
After an eight-year rule by a centre-right cabinet under the leadership of Mikuláš Dzurinda, Slovaks have once again voted for change. 
This time however it was not at the cost of HZDS leader, Vladimír Meciar, but Dzurinda's SDKÚ-DS. This year's symbol of "change" is Smer-Social Democracy led by Robert Fico, which received almost one-third of all votes cast (almost 680,000, which is about 300,000 more than in the 2002 elections). 

Slovakia as part of a negative trend
Political tensions in Central and Eastern Europe are casting a shadow over investor confidence throughout the region that is struggling to recover from the recent sell-off across emerging markets. 
Analysts and investors have been unsettled by Ukraine's battle to forge a new government and the Czech Republic's post- election political stalemate. 
But the emergence of populist governments in Slovakia and Poland in particular have sent shudders through the international investment community. "These countries are used to political turmoil, but its looks pretty grim at the moment," said Lars Christensen, senior analyst at Danske Bank. 
Worries that record oil prices could trigger a rise in borrowing costs and as a result undercut global economic growth have been partly to blame for investors' retreat from emerging markets that has sparked turmoil on financial markets in parts of Central and Eastern Europe. 
Analysts are concerned that both politics and economics could be both moving in the wrong direction in Slovakia with the new government led by Prime Minister Robert Fico having severely rattled investors' confidence in the country. 
Once a model of economic transformation, Slovakia's new coalition government fronted by Fico's Social Democrats and including ultra-nationalists and the Movement for a Democratic Slovakia led by a former authoritarian prime minister, Vladimir Meciar, has sparked fears about the outlook for foreign investment in the nation. 
At the same time, Slovakia's economy currently risks overheating with inflation running at above 4 percent, the nation's current account ballooning out, GDP growth surging and a drop in the flow of foreign investment which has helped to prop up the currency, the koruna. 
While Fico insists that Slovakia's investment climate will not be put at risk by the new government, his threats made prior to the June election about rolling back economic reforms launched in recent years have deeply unsettled investors. 
The real test of the new political world taking shape among the EU newcomers is likely to be their commitment to joining up to the euro. Analysts doubt whether the Fico government's spending plans will allow it to meet its 2009 deadline for signing up to the common currency. 

Budapest appalled at Slota's anti-Hungarian statements
Populism has a way of unleashing ethnic tension. Gypsies and Hungarians are at particular risk in Slovakia.
The Hungarian government is shocked by anti-Hungarian statements by Jan Slota, leader of the Slovak National Party (SNS), now a coalition member, which he made for the Saturday (July 22) edition of the Czech daily Lidove noviny, Hungarian Foreign Minister Kinga Goencz said at a meeting of diplomats on July 24. 
Slota said that Slovaks were oppressed by ethnic Hungarians in southern Slovakia. The SNS is a junior partner in Fico's three-party government arising from the June general elections. 
"We were shocked by Slota's weekend interview," Goencz said, adding that Hungary had hoped that the tone of Slota's statements would change after his party joined the governing coalition. 
Slota said he wondered why no one abroad or Slovak senior officials resented the activities of the Hungarian Coalition Party (SMK) in Slovakia that questioned the borders delineated after World War One, and the Benes decrees, which sanctioned the deportation of Germans from Czechoslovakia after World War Two, and sought the cancellation of the 1920 Trianon treaty, one of the fundaments of Czechoslovakia's emergence. 
Slota said that the SNS did not want to oppress anyone or to ban the use of their mother tongue. "We are only struggling against those SMK officials who as a minority oppress the majority nation on its sovereign territory, on the territory of Slovakia," Slota said. 
Slota said he envied Czechs for having been able to deport ethnic Germans from the former Czechoslovakia. 
There are some 500,000 ethnic Hungarians, who make up about ten percent of Slovakia's population. They mostly inhabit southern Slovakia alongside the border with Hungary. 
"It is apparent that such statements... are not consistent with European norms," Goencz said. "There is undoubtedly space for the Slovak government to comment on the statements," she added. She said that if the Slovak government does not disavow Slota's words, Hungary would officially ask it to do so. 

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CREDIT RATINGS

S&P's rating may weaken on Euro postponement 

The International ratings agency Standard & Poor's warned recently that Slovakia's rating could weaken if the new cabinet wasted resources and postponed the introduction of the Euro, Slovak Spectator reported.
A worse rating would mean a rougher road for the future government in loan negotiations. Robert Fico, whose Smer party won the 2006 parliamentary elections, reiterated on June 18th his commitment to the January 2009 date of Euro adoption set by the Mikulas Dzurinda government, but did not rule out changes, the news daily reported. According to analysts, the Euro adoption would be threatened if a Smer-HZDS-SNS ruling coalition were formed. A Smer-KDH-SMK coalition could also pose a risk.

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INFORMATION TECHNOLOGY

Global IT leaders carve out new markets 

Spending on information technology (IT) services surged by nearly 22 per cent in Slovakia in 2005, the marketing group IDC said recently, as economic change continued to take hold in the new European Union member state, Deutsche Presse-Agentur (dpa) reported. 
Releasing the report in Prague, the IDC said that the growing sophistication of the Slovakian IT industry had led to market consolidation and a drive by international IT groups to carve out new business empires in the country. 
Slovakia reported a robust 6.3 per cent economic growth rate during the first quarter. The growing maturity of the Slovak IT market had also helped to fuel demand for services and had resulted in a shift from support and installation to application consulting and customisation services, the IDC said. Together the top five vendors, which include Hewlett-Packard, IBM, Siemens Program and System Engineering and Siemens Business Services, expanded their market share from 30 per cent of spending to nearly 35 per cent, the report said. 
"These numbers reflect the increased interest of international service vendors in the Slovak market," said Jeffrey Vavra, IDC's senior analyst for IT Services in Central and Eastern Europe. "And with good cause," he said. Over the last couple of years, Slovakia has exceeded expectations in terms of economy, reform, and IT, and the IT services market is no exception. "Manufacturing in particular is experiencing a renaissance and FDI (foreign direct investment) should continue to fund new factories which in turn will boost the need for IT," Vavra said. 

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